OPay enforces NIN linkage, sets March 1 deadline for compliance

OPay, a prominent fintech company, has announced that as of March 1, 2024, all accounts not linked with the National Identification Number (NIN) will be subject to blocking.

Ikponmwosa Odiase, OPay’s Director of Partnerships, revealed this directive during a media interaction session in Lagos.

The company has already restricted transactions for tier 1 account holders who have not updated their mobile app with their NIN.

These measures align with the Central Bank of Nigeria’s directives to reinforce Know-Your-Customer (KYC) practices within the financial system.

Odiase emphasised that compliance with NIN is now mandatory for both existing customers undergoing updates and new account openings.

He stressed the importance of this initiative for enhanced security, stating that any non-compliant accounts or fraudulent activities will be swiftly removed from the platform.

In addressing concerns about the potential impact on financial inclusion, Odiase acknowledged that the exercise might pose challenges, particularly for those in rural areas without easy access to NIN.

Despite the setback, he highlighted the collaborative efforts between fintechs, banks, the Central Bank of Nigeria, and other stakeholders to combat fraud, a prevalent issue in the financial industry.

The Director also noted the collaborative industry response to rising fraud challenges, emphasizing the need for a correlation between an individual’s face and the photo on their NIN for added security.

He recognised the evolving landscape, where fraudsters are persistent, and the industry is actively responding to mitigate risks.

Regarding the Central Bank’s directive issued in December, which includes placing bank accounts without Bank Verification Number (BVN) and NIN on “Post no Debit” from April 2024, Odiase reiterated the urgency for compliance. Existing unfunded individual Tier 1 accounts without BVN or NIN face immediate placement on “Post No Debit or Credit.”

Furthermore, all funded accounts or wallets without the required BVN or NIN will be subject to “Post No Debit or Credit” from March 1, 2024, with transactions prohibited thereafter. The circular emphasises the electronic revalidation of BVN or NIN for all accounts and wallets by January 31, 2024.

In the wake of OPay’s proactive measures to enhance Know-Your-Customer (KYC) practices, recent scrutiny has brought to light concerns over the company’s existing weak KYC system. Investigations by TechCabal reveal instances of impersonation and weaknesses in OPay’s account tier structure, raising red flags regarding the vulnerability of its digital platform to potential bad actors.

Since its inception in 2018, OPay has rapidly ascended to become one of Nigeria’s leading mobile money services, leveraging extensive marketing campaigns to attract new customers, particularly those who are unbanked. The company has actively participated in collaborative efforts within the fintech industry and commercial banking sector to simplify the registration process for new users, even relaxing identity verification requirements for basic bank accounts with limited features.

However, recent criticisms and concerns about the surge in financial fraud in Nigeria have spotlighted the lax standards employed by OPay. TechCabal’s investigations underscore that the company continues to permit new users to register on its platform without stringent verification processes.

This revelation adds a layer of complexity to OPay’s ongoing efforts to strengthen KYC practices, highlighting potential challenges in the balance between accessibility and security within the evolving digital financial landscape.